September 18, 2025

The Impact of Global Interest Rate Policy on Exchange Rate Stability in Developing Countries: A Case Study of Indonesia

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Significant depreciation of the rupiah occurs due to interest rate hikes from the Fed and ECB.
The increase in the BI Rate provides short-term stabilization for the rupiah exchange rate.
The Granger Causality test confirms a causal relationship between global interest rate hikes and rupiah weakening.
Domestic monetary policy implemented by Bank Indonesia plays a crucial role in mitigating external economic impacts.

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Implication

This analysis reveals that global interest rate policies notably affect exchange rate stability in Indonesia, suggesting intervention by domestic monetary policy is essential.

Cite This Study

Falah et al. (2025) studied this question.

synapsesocial.com/papers/68d434ef713b0b5dfea74aae https://doi.org/10.64910/ecmont.v1i1.2

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Implication

This analysis reveals that global interest rate policies notably affect exchange rate stability in Indonesia, suggesting intervention by domestic monetary policy is essential.

The Impact of Global Interest Rate Policy on Exchange Rate Stability in Developing Countries: A Case Study of Indonesia

Key Points

Discussion

Implication

Cite This Study

The Impact of Global Interest Rate Policy on Exchange Rate Stability in Developing Countries: A Case Study of Indonesia

Key Points

Discussion

Implication

Cite This Study

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